Posts for TransPerfect

It’s something that comes up again and again. Especially in an organization in the middle of a crisis.

I have always believed that loyalty to a company is superseded by loyalty to people. Because I don’t believe it’s still called loyalty if it’s not a two-way street.

Most companies these days have at-will employment. Their HR teams are meant to protect the company rather than to help you. The sole legal purpose of a company is to provide money to shareholders, and as such, the structures in place are designed to ensure this single objective is followed above all others.

When I come in to work in the morning, it isn’t because I really want to make some shareholders some money. It is because I believe that what I’m doing will make the lives of my colleagues and teammates better. I go in to work because I believe in my manager’s vision of where to go next. I go in to work because I feel loyalty to my colleagues in sales and production and technology and management. I feel loyalty to these people – and that is why I work as hard as I do.

A company can help create these relationships by encouraging entrepreneurship within the organization:

I have felt empowered here at TransPerfect thanks to my manager, Phil; my colleagues in production whose client focus is second to none; my partners in sales with whom I’ve built relationships of mutual trust as we created client solutions; my fellow technology leaders and experts across the company who have overperformed day after day; and most of all, my team, who each day inspires me to be better. TransPerfect has created something special in how it has empowered so many people. And that is one the main reason why I have found value at TransPerfect. Because in my personal experience, for much of my time here on the tech side, promotions were deserved and incentives were tied to success. I was able to carve out my small portion of the TransPerfect dream.

Conflating the loyalty you hold towards your colleagues to the loyalty to a company is a confusion of category. Though it is in some people’s interests to do so, it’s a game of two card monte. As Upton Sinclair wrote:

It is difficult to get a man to understand something when his salary depends upon his not understanding it.

My loyalty lies with my team, my colleagues in sales, production, technology, and the rest of those I work with.

Because in the end, that’s where loyalty should lie – with those who have helped make you successful. Those with whom you have formed partnerships – either as a manager, a colleague, or a subordinate.

This loyalty is a two-way street. It is earned and deserved. And TransPerfect has long been the beneficiary of the system of loyalties it allowed to flourish. And I have been fortunate enough to find many colleagues who earned my loyalty, and to whom I have given mine in turn.

He framed his talk as a guide for founders and translation company owner-operators. But in an industry fraught with mergers and acquisitions, it had lessons for everyone.

Cowan’s Tenure in this ‘Curious Industry’

Cowan gave this talk from a position of unique insight. He founded Lionbridge in 1996 and led it as CEO through 20 acquisitions. In 1999, he brought the company public. And then he brought it back private again in a sale to the private equity firm H.I.G. in 2017. (I met Rory when he first arrived at SlatorCon, and with a smirk, he introduced me to a fellow from H.I.G. who happens to also be on the Board of Directors.)

Cowan described the translation industry as unique. He said it in a way that you might talk about a talented but frustrating teammate when you’re trying not to offend anyone. He played up this specialness of the owner-operators in the translation industry, declaring that most founders were “sensitive humanities majors” and “global misfits” who lack “street corner hustle.”

Cowan implied that his success at Lionbridge came because he didn’t have one of those “sensitive majors”, but a Harvard MBA. The path he charted for Lionbridge could serve as a primer for the evolution of the trends du jour in the business world…going public, synergy, outsourcing, crowdsourcing, on demand, the cloud, private equity. In contrast, TransPerfect’s success has often come from New York City hustle: the willingness to work harder, figure out how to do things for the first time, and the willingness to invest in people and long-term projects. I think it’s a stretch to attribute all of this to the comparative merits of an NYU versus Harvard MBA, but there’s a reason that most of Lionbridge’s growth has come from what he called “sporty” M&A deals with owner-operators.

Perhaps the most interesting wrinkle with which to analyze his talk….Much of the team that built up Lionbridge left as the sale approached, feeling frustrated and marginalized – several of them to become my colleagues. But…only a few short months after the sale to H.I.G. closed, Cowan stepped down as CEO after 21 years. I understand that many of his closest allies at the company have been let go by the new owner as well. He remains Chairman of the Board.

Should I Sell?

Cowan said the main question to determine whether you should sell or not was whether you woke up in the morning wanting to go to work. If you don’t, he said, then this was the time to sell – at what he believes is a market peak. He focused on companies that were having trouble scaling – a major problem among the many small to mid-sized companies in the industry. He attributed much of the problem to the founders themselves, as the skill sets that make a small company successful need to evolve in order for the company to keep going. For those struggling, Cowan suggested selling out as a means to cash in and get the help needed to scale.

Cowan emphasized that the process of selling was going to be painful. And it would need to be “endured.” The roller coaster process of Lionbridge’s sale was described in an excellent Slator piece by Florian Faes: as bidder after bidder dropped out, as H.I.G. was accused of “not adequately valuing the company” and “management attention was drained.” The deal did eventually close, but as Florian concluded:

It can be taken as an indication that ownership and top management at leading LSPs consider mega-mergers in the language services industry as difficult to pull off — and post-merger integration, risky.

Cowan gave 3 warnings to any company that might consider being sold. First, be upfront:

Be sure to “Clean up” or proactively disclose all ambiguities before starting process: Buyer WILL find them and they WILL taint value.

Second, there needs to be syzygy, a complementary pairing, between the purchasing company and the purchasee. “Values and culture are paramount,” he stressed.

Third, and the most important thing being purchased, according to Cowan, was “the next tier” of leadership. Buyers need to “risk adjust” the founder’s departure. He explained that this is why it was essential to involve the senior team of the company in the acquisition process. If you don’t, you risk disappointment, he warned.

After the Sale: Curing Founderitis

Given that the industry is filled with founders who own-operate their business, and given that Cowan has acquired 20 such business, and that he was recently acquired only to be pushed out himself…he clearly has a lot of opinions on this topic.

He suggested that buyers should do more than simply price in the founders’ departure: it was better them to leave as a way to cure the “founderitis” that he saw afflicting many companies. Only then were companies able to move “from maternal/paternal leadership to business metrics.”

Addressing the 80-odd members of the language industry, Cowan was brutally honest about the costs of selling out though. Here’s my best attempt to recreate his slide:

(Sort of kidding. Cowan didn’t use a meme – though as Renato and I agree, the translation industry needs more memes…)

Cowan makes very clear that founders need to get out in an acquisition – or if they stay, that they should become closer to team leads than the founders they used to be. As a founder who was pushed out of his position and much of his handpicked team fired after being sold, I wasn’t sure whether Cowan meant this as a warning or as a positive. Maybe just a description of reality.

He used a rather Harvard MBA term – “Synergy Targets” – as a soft way of saying something. He was more explicit about culture. I thought he even sounded bitter when he described how a sale destroys the culture you have built up.

The ideal seller in Cowan’s world is someone who wants to “exit” and sip Mai Tais on a beach. Because in the end, the point he tried to emphasize to any prospective seller…selling is about losing control.

I’ve managed over 50 technology employees over my career – and have been managed as a tech lead for quite some time. Here are some hard-won lessons from my experience.

1. Be bossy.

We’ve all seen Steve Jobs running around Apple having tantrums in movies. Especially as a young manager, he did this often – before he learned there were better ways to manage. There’s a small place in the world for that. Being bossy doesn’t always fail, but it is a recipe for disaster. When you look at the inspiring example of Sheryl Sandberg and the transformations she wrought at Facebook, you can see the benefits of true leadership. Leadership that is earned rather than cheap theatrics. Google has a culture that encourages cooperation and has created one of the most profitable companies in the world.

Ed Catmull is the founder of Pixar and the author of one of the best books on management, Creativity Inc. He explained what he saw as the core of good management:

I believe the best managers acknowledge and make room for what they do not know—not just because humility is a virtue but because until one adopts that mindset, the most striking breakthroughs cannot occur. I believe that managers must loosen the controls, not tighten them. They must accept risk; they must trust the people they work with and strive to clear the path for them; and always, they must pay attention to and engage with anything that creates fear. Moreover, successful leaders embrace the reality that their models may be wrong or incomplete. Only when we admit what we don’t know can we ever hope to learn it.

Many managers seek to emulate the raging teenager in Steve Jobs mode. They take as their naive mantra, “Be Bossy.” That’s the quickest way to lose all your best people.

2. Create a culture of blame.

I used to work for a company that had a top-down culture of blame. I hadn’t realized how bad it was until after (I was working in a different division). I heard horror stories from people who now lead this group. They spoke of how the head of their group would yell at their boss for every failure. And then how their former boss would break phones and throw stuff against the wall and loom over their desk. There was a rigid process to follow that was almost impossible given the rate of work. Anyone who tried something new was personally blamed. The turnover rate was catastrophic. It took a herculean effort to transform this culture into one where people felt able to fail and innovate.

The worst companies are those that are built on a culture of blame – because this leads to the creation of bureaucracy – quoting Rory Sutherland:

Bureaucrats really love a formula because it prevents them from having to exercise judgment for which they might be blamed…

You can avoid blame by claiming what you did was entirely rational, and as if the act was therefore unavoidable because reason told me to do this. We scoped the market, did market research. It told us that people needed that. So we produced that. If you follow all the precepts and fail, you won’t get fired or blamed because you were rational. If you do something which is better, but involves a degree of human imagination or judgement, if it works, well and better, you might get a bit of credit but you probably will get people saying it would have been even better if you had followed reason. If it goes wrong, you’re fired.

Innovation comes when you take risk. And bureaucracy is it’s death.

To quote Eric Schmidt: “To innovate, you must learn to fail well.” Failure is inevitable. And a business needs to acknowledge that. The businesses that are best with technology are built on this assumption. For the company in question, this led to a rapid adoption of various technologies and the development of many new ones.

3. Don’t value your employees.

One of the most dispiriting things I’ve ever experienced was a cartoon villain of an attorney threatening a room full of employees that we could be “upgraded” in a week. It’s hard to feel motivated and to push yourself and to make the small right decisions everyday when you feel devalued. And the truth of technology is that doing it right is hard. It involves long-term thinking. You need to design systems – and make decisions that allow you to scale. If you’re pushed to think short-term because you’re short-staffed or undermined or a pawn in political games, things will go okay for a while. Until they don’t. Those who sell and those who produce create value every day. But technology sets the foundation for them to create more value next year than they did today.

Never push loyal people to the point where they don’t give a damn

People aren’t interchangeable. They can’t just be upgraded like a faulty RAM drive. In the tech world where there is so much demand, that’s especially true. You especially need your tech team committed to making your company better and thinking long-term.

If you’re a decent person, a decent manager, an effective CEO, when asked the question of what made you successful…the answer is never “hard work” or “a great idea“. All of that helps. As does luck. (We all need to check our privilege.) But the one core common thing is a great team. This is a truism that Rory Cowan (former CEO of Lionbridge) stated at SlatorCon last week: “What someone buying your company is buying is ‘the next level’ of executives below the founder.” It’s probably one of his few areas of agreement with rival, Phil Shawe (co-CEO of TransPerfect). As Phil stated in his GlobalLink NEXT presentation as the key to the company’s growth:

– Find the best people.
– Align incentives.
– Get out of the way.

4. Be a Communist.

You can’t centralize everything. Anyone who promises to centralize all technology in a single group is promising to destroy innovation. Technology needs competing groups. It needs side projects. It needs, to quote Phil, controlled chaos.

What a tech company does need is to agree to the “rules of the road.” They need to agree on rules for competition and cooperation. But if you put one dictator above everyone, you will fail.

5. Being clueless about technology.

You don’t need to be an expert in technology to lead a tech company. After all, it was Steve Jobs, not Steve Wozniak, who ran Apple. But you do need to engage with the concepts and care about it. You need to have a base level understanding of what’s going on at minimum. And from there, you can often manage people rather then technology. The best tech CEOs need to be able to assert in clear principles their vision.

What you don’t want is to not know how to operate the most basic consumer technology. I once worked with an executive to whom I handed a set of Apple earpods. This was back in the day when Apple earpods still had wires and when there was still a headphone jack on the phone. (*Those were the days!*)

I handed the package over to the executive, and they looked at me quizzically. I assumed they just wanted me to open the package, so I did that, and handed the opened case over. They were still confused. So, I unwound the headphones and held them out. They asked me to explain how it worked – and I really wasn’t sure what to say. “These pieces go in the ears,” I said. “And you can talk normally, but the microphone is here.”

Now, there’s nothing wrong with that. My frustration came when the same executive told me that they didn’t understand what tech people did all day. And then assumed that they must be lazy and drains on company profitability. Many companies have thought that over the years, but few of those companies continue to exist today. I was just lucky enough that another executive came along to guide my career from there.

Conclusion

It’s easy to say you’re a tech executive. It’s harder to be one. In the end, most of the things to avoid are the same things that you should avoid if you want to be a good person.

Rory Sutherland, the Vice Chairman of Ogilvy & Mather Group, interviewed on the Knowledge Project podcast, gave a great example of the what gets lost in automation, talking about the difference between an automated door and a doorman, pointing out that while an automated door offers the main benefit, it misses the ancillary benefits of a doorman from security to status to accepting deliveries:

This is a criticism that I have for Silicon Valley, that what they often do is they take something that a human does, they define it’s role very, very narrowly, devise an algorithm or technology which replaces that very narrow role and then assumes that the human being has become redundant…

You realize that what Silicon Valley is doing is sometimes they take the simplest and most salient part of someone’s job, replacing that, and then leaving the rest of the functions to go hang…

Quite a lot of these [jobs] have evolved to have multiple purposes of which one may be the most obvious; but that doesn’t mean if you replace the one with a technological solution, that all three somehow become miraculously technologized…

I’ve been to 3 conferences in the past 3 weeks: GlobalLink NEXT (for clients of Translations.com/TransPerfect’s translation and localization technologies); Tableau 2017 (for analysts and business intelligence experts); and SlatorCon New York (focusing on language services). Each of them has focused a lot on two concepts:

The growing importance of machine learning to businesses; and

How this machine learning still points to the paramount importance of people to an organization.

I’ll be writing about these concepts more in the coming weeks – as I think navigating between these two concepts will be the key for any organization in the coming decade.

A special thanks to Shane Madden of TransPerfect for pointing me to this podcast. As he said… It was brilliant.

As my father used to say: Water seeks its own level. I never knew what that meant as kid, but what I’ve learned as an adult is that it means if you do the right thing, over a long period, build love and trust with enough people and help make them successful, then you’ll be OK…maybe even better than OK.

Especially in an age with politics and current events as dark as ours has gotten, as corruption is rewarded and an obstinate refusal to negotiate results in windfall power, it’s important to realize that what you do matters over a long enough time horizon. To act honorably, and to realize that in the end, to quote clergyman Theodore Parker:

(Or why I turned Google down)

Seven years ago this month, I started working at TransPerfect. Andy, with whom I had co-owned a small startup a few years before, recruited me for a small technology team here.

When I first joined, I considered TransPerfect to be a temporary gig. I saw it as a way station before I would go on to found my own company. As I started, I learned how the company’s core technologies came together and how the company produced work. I sat with the production and sales groups for a week, working with them, analyzing. I created a list of 11 suggestions consisting of small web apps and information passed via connectors to existing APIs. Together, they would help bridge some of the gaps that I could see causing frustration and pain. My suggestions weren’t taken seriously. As a result, I didn’t feel empowered to effect positive change – and that frustrated me. Moving on to another company seemed to make more and more sense. In early 2012, my boss quit and I started looking for options.

Changing course

Three events in rapid sequence changed the course of my career in early 2012:

1) I met with a senior manager who explained to me that they didn’t value technology. We didn’t add to the bottom line because we didn’t produce revenue. “All tech people were lazy,” they said. “Except you I guess.” (Probably because my jaw had dropped.) I didn’t see that as a ringing endorsement, and I began to look for a new job in earnest. If that’s what one of the most senior folks at the company thought…how could my team succeed? And how could the company succeed given the increasing importance of technology?

2) Because my boss had quit, I began to work with co-CEO Phil Shawe. It was sometimes frustrating. Phil would make a point adamantly. And though he wouldn’t direct me to take a course of action, he’d insist on trying his suggestion. That was fine. What was annoying was that he turned out to be right quite often. I couldn’t understand why – which made me realize that I had a lot to learn from him. The guidance he provided led me to better understand TransPerfect as a whole. I realized that while some senior managers dismissed technology, it obsessed him. He encouraged me to take his feedback, but also to disagree and to try out things on my own. In short, he empowered me to start tackling things I felt were important as well as what he did. I began to knock out my list of 11, rather than waiting on someone else to do it.

3) When I started to put my resume out there, Google started recruiting me. Google is my all-time favorite company. I had introduced my friends to Google in the late 90s after reading a blurb on the small company whose search was “like magic”. I was a Gmail and Chrome beta user. I tried out Google Wave while it crested. I mourned the loss of iGoogle. I have a Google Phone, a Google Home, a Google Chromecast. I tried unsuccessfully to introduce Gmail to TransPerfect. If there was one company, aside from one that I ran myself, that I would jump to, it was them.

The choice

Like LeBron, I had a decision to make. And it wasn’t an easy one.

The encounter with the senior executive lingered. They had made clear to me that I should treat the company as theirs – and that they saw my team’s hard work as waste. But Phil empowered me to treat the company like it was mine. I had a team and the backing of the co-CEO to try to made the company a better place.

So I turned Google down. I had begun to see TransPerfect as the best place to train me to be an entrepreneur.

Over the next year, I rolled out one small tool after another from my list. (I’m using the first person ungenerously. As I’ve written before, I would have achieved nothing without talented partners: Eugene K., Alex P., Chris M., Chris C., Bill B., and more.) Senior developers gave us guidance (thank you, Nils!) but we were mostly on our own.

The first web app we launched was adopted immediately. Within months, two of our tools generated well over half of the company’s quotes. It was clear we had found a need and fulfilled it. The second tool we put out in beta facilitated communication pass-offs between teams. Today, teams use it to exchange over 13 thousand messages a week. As success breeds success, people began to throw more projects at us – and we took on many of these as well.

TransPort

By 2013, my team had completed all but 1 of my 11 initial projects. The remaining one was the most ambitious. To facilitate communication between major apps that were inefficiently integrated.

I wanted to take this project on – but needed a handle to do so. I found it when Phil tasked me with creating a client “WOW” experience in replacing the company’s portal (working with Raja M.)

It was a frustrating ball of competing priorities – and we struggled to get adoption. The road to success began when we brought on the right team. Igor, Leroy, and Iskandar came on to stabilize the development team. And Nathan Gao brought a passion for user experience that transformed the product. (I’m missing so many people who contributed as the team grew – Alric, Victoria, Madhur, Silviya, Lenny, Patti, Anto.)

Over the past 2 years (as explained at the just-finished GlobalLink NEXT conference), the product grew to over 20,000 enterprise users. Hundreds of companies submitting thousands of projects a week. With just about 100 trainings over all that time. (How’s that for user experience?)

There’s no better graph you want to see as an entrepreneur. It tells you that you’ve identified a need, and that your product fits it. If the graph keeps going on long enough, then it reveals the most important thing: that you have the team that supports the problems of growth.

The TransPerfect model

As an aspiring entrepreneur, an “ambitious overachiever”, it makes a lot of sense for me to focus on founding a startup. There are upsides and downsides – but it best fits what I want out of life. That’s true of many people on my team. In fact – when I’m looking to hire someone – that’s one of the things I tell people: We run our team like a startup within a larger company. That is the key to the team’s and product’s success.

Eric Ries writes about this in his forthcoming book, The Startup Way, as a strategy more established companies need to adopt. Reading some of Ries’s interviews, I realized this approach is exactly what made TransPerfect attractive to me – and is what I tried to describe to people I was recruiting for the team.

Phil has managed to apply these principles, hard-won, over his career at TransPerfect – as evidenced by team after team that operates similarly to my own. It’s what has made all the difference over the 20+ year history and is why TransPerfect is now a leader in the field.

At GlobalLink NEXT last week, Phil summarized the core of what has driven the company to succeed:

I can say that this is what enabled TransPort to succeed, as I applied the same principles to the product. And it is what empowered me to create the team in the first place.

I have always wanted to form my own company. But TransPerfect has offered me the experience of running a startup within a larger company. It remains a great place to exercise an entrepreneurial spirit. And so long as that’s true, I’ll continue to (as we say here of TPT spirit) bleed blue.

* I expect to get some grief for this headline from my colleagues. So be it.

For all the times people say, “I had that idea first…” or…my original insight was to do what everyone else was doing, (but better!)… There’s one thing that all technology entrepreneurs seem to agree on… Ideas aren’t enough for success.

The foundation of success is the right team and good timing:

Ideas without implementation, or without an exceptional team to implement them, are like assholes and opinions: everyone’s got one.

For the past 5 years at TransPerfect, I’ve been empowered to run an intrapreneurial team (the term makes me cringe, but it fits) creating solutions that have helped the different pieces of the company communicate and do their work. This is the extraordinary thing compared to what I’ve heard from many of my friends: there wasn’t some managerial dictat that the projects I worked on should be done. (Many of the most impactful projects I worked on were side projects that I came across because of a chance conversation.)

I was entrusted by my manager to find opportunities, things that weren’t efficient – and to spend some time and resources getting something done. And it worked. Today, nearly 70% of the company’s work has at least 1 workflow step (sometimes as many as 10) go through products my team has built and we run one of the company’s flagship properties, TransPort.

Having the idea though accomplished little. Ideas always evolve as they are implemented. The success that I’ve been able to have isn’t because I had ideas – but because of the team I’ve been lucky enough to work with – from my core team members, to being empowered by senior management, to the extended network of technology, production, and sales that have been part of every success.

This has been the core of my success, and I would wager, of the company’s success in general.

All competitive advantages – price, quality, even technology – are commoditized over a long-enough time horizon.

The only way to have a sustainable competitive advantage is people.

Phil Shawe, co-CEO of TransPerfect, at GlobalLink Next 2016 in San Francisco. (Came across it while thinking through a piece on the translation industry, private equity, and Labor Day over at my political blog.)